The C.D. Howe, Business Cycle Council, stated on May 1 that the Canadian economy officially entered a recession in the first quarter of 2020. The monthly Gross Domestic Product (GDP) reached a peak in February but dropped 7.5 percent in March before falling by another 11.6 percent in April amidst the COVID-19 pandemic.1 Millions have been affected by this economic downturn, with unemployment claims reaching 2.13 million by April.2 As the job market continues to remain stagnant across various industries, should you be considering heading back to school? Earning an advanced degree or certification could make you more desirable as a candidate and increase your earning potential. Before making that decision, consider the following pros and cons first.
Pros of Returning to School
#1: Potential For Higher Salary
Many industries and professions value education - and are willing to pay more for it. Teachers and educators, for example, are often paid a higher salary if they have earned their Master's degree. In fact, according to the Ministry of Education, if you have a master's degree with ten years of experience, it's not unlikely to earn a salary upwards of $100,000.3
Review any industry salary insights you can find and determine whether or not a higher degree could correlate to a higher-paying job. If the answer is yes, this could be an opportune time to head back to school to advance your career.
#2: Career Change
It's not uncommon for Canadians to graduate from high school or college, land a job and stick in that field for years. If your job or line of work is suddenly in jeopardy, the onset of a recession could be an exciting time to reevaluate your career path. Maybe you've stuck it out this long because it provided a steady paycheck and good benefits, and there's nothing wrong with that. But this may be a great time to head back to school and pursue a career you've recently grown interested in or have always been passionate about - especially if that steady paycheck is now nonexistent.
#3: "Ride Out" Economic Uncertainty
If unemployment is inevitable in the face of a recession, or you've been job hunting for months in a stagnant market, maybe you better spend time gaining a degree and new skills. Furthering your education could make you a more appealing candidate, potentially increasing your odds of landing a job and earning more. In many cases, this could be a more rewarding alternative to remaining jobless or taking up work in a position outside of your field - where you are not gaining valuable work experience.
Cons of Returning to School
There is $28 billion in outstanding student loan debt in Canada - contributing to it may not be an appealing option for some.4 Before determining whether or not to head back to school, you'll want to take the price tag into serious consideration. If you can complete courses online or continue working while taking classes, this could help cut costs significantly. If you are considering heading back to school to earn a higher paycheck in your field, make sure the potential pay increase offsets whatever costs you'll accrue pursuing a degree or certification.
#2: No Guarantee of Job Prospects Post-Graduation
Higher education programs differ significantly. Some may offer certification after several months, or more advanced degrees could require 2, 3, 4+ years in school. While there's no guarantee of how long the current recession will last, historically speaking, it's entirely possible that heading back to school could help you "ride it out." The effects in Canada were much less severe than the 2008 recession in America; however, the 2008–2009 recession did last seven months. If you had chosen to enter a one-year graduate program at the start of the recession, you might have successfully "ridden out" the recession by the time you graduated. Economic instability can be unpredictable, making it nearly impossible to tell if heading back to school will guarantee you graduate in a better job market.
#3: Job Experience May Be Better
If you can still keep your job or find another one in your field during a recession, you have an important consideration to make. Would it be more beneficial long-term to gain on-the-job training and experience or leave the field to receive higher education? Some hiring managers and business owners value work experience over higher education, depending on your industry and profession. If this is the case, time and money on an advanced degree may not significantly impact your job prospects or pay.
When a recession hits, economic uncertainty can make anyone feel uneasy and uncertain. Before deciding what your next move should be, consider weighing the pros and cons of returning to school or working in the field. If you are still unsure, your financial advisor may be able to help you make better financial sense of either decision.
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